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Mid-South planting advances

Cotton planting progress is near 11 percent, average is 12. Chinese cotton planting is behind average.

Corn planting in the north Delta and Mid-south is nearly complete.

Rice planting will exceed intensions if the current pace is maintained.

Dry weather reduced India’s wheat production 2 million tons. China and Europe also have dry weather.

Cattle, hog and chicken feed demand is rising rapidly worldwide.

Soybeans

Bearish news: World soybean supply continues to grow as harvest progress in Argentina and Brazil adds pressure to prices. Export inspections were down over last week at 8 million bushels that met anticipation but the number is low. Soy oil imports are down 79 percent from last year.

The large number of buy positions held by traders is subject to a sell off in profit taking at anytime. World soybean supplies are increasing despite Chinese demand. This price and time maybe a good opportunity to sell part of this year’s crop. Recommendations by traders include having 40 percent sold near $10.

Bullish news: Export shipments for the market year are 1.285 billion bushels. Meal stocks were expected to be around 483,000 tons. The actual number was 328,071 as of March 10. Weekly soybean export sales were 368,600 million tons. Soybean crush was 4.684 million bushels. The accumulated crush has increased 4.4 billion from last year.

Soy meal exports to South-East Asia in the marketing year ending September hit their highest level in a decade due to drought that lowered supplies in Asia. Brazil is now 89 percent harvested, with Argentina thought to be about 42 percent done. Wet weather has delayed harvest of the record crop in Argentina. Chinese soybean imports were up 3.9 percent above last year over 4 million tons.

Buy side open interest increased 820 contracts. Traders have been buying soybeans as fear of liquidation and profit taking abates.

There is a rumor that Argentina may have another farmer strike brewing. Argentina farmers are holding soybeans in storage to combat high inflation. China and Argentina trade relations remain bearishly uncertain. Chinese imports of Argentine soybeans during the month of March were zero this year, compared to 443,000 million tons last year.

Corn

Bullish news: Prices for cattle, hogs and chickens continue to rise. Demand is rapidly exceeding the supply of reduced herds and flocks. Meat prices are going up. Feed demand is increased both in the United States and Asia.

Higher energy prices are supported by increased demand. Ethanol blend is now the mandate in the United States. Ethanol demand has increased. The byproduct of ethanol manufacture is distiller’s grain. Only half the volume of corn is used to make ethanol. The other half is higher protein feed for animals than field corn. The market for distiller’s grain is growing rapidly.

Export inspections met market expectations at 37.699 million bushels. Shipments for the current crop year are above average at 1.087 billion bushels. Weekly export sales of 1.481 million tons exceed market anticipations below a million tons. Corn in China is high at $7.16 a bushel on the Dalian exchange.

Bearish news: The demand for beef is on the increase but herd size is the smallest in six years. The numbers of cattle on feed remains near a six-year low. Corn planting progress is bearish at 50 percent planted where average is 25 percent. Seven percent of corn is already emerged.

The Chinese government is yet in the process of selling grain out of stored reserves to keep down the price of corn and food to fight inflation. It is estimated that China has 35.6 million tons of corn held in reserve. During the previous two weeks, the Chinese government has offered 1.38 million tons for sale in domestic markets. They have offered that much more for sale this week. Export inspections do not meet USDA projections for the year at 3 percent behind.

Wheat

Bearish news: USDA weekly wheat export sales for the week were 464,700 million tons. Sales were up from the previous week but down from the monthly average. Wheat prices remain under pressure from the known world carry over supply.

Jordan bought 50,000 tons of Black Sea wheat. U.S. wheat remains uncompetitive to that part of the world. Cold temperature slowed winter wheat growth in China as snows delayed spring wheat planting. However, spring wheat is typically less than 10 percent of total Chinese wheat production.

The latest USDA winter-wheat crop conditions are 69 percent in good or excellent condition up from 65 percent a week earlier and 43 percent last year. The United States and Canada are both on track to produce a bumper wheat crop this year. Wheat supply is growing larger.

Bullish news: Export loadings this year are 745 million bushels. Winter wheat maturity is behind, with 6 percent headed where 11 percent is average for this date. The recent eruption of a volcano in Iceland could mean problems for European crops.

Adverse weather has hit China’s wheat crop and slowed plantings of corn and soybeans. The China National Grain and Oils Information Center that the wheat crop in China, the world’s biggest producer, may be damaged by a freeze that has delayed planting by more than 10 days. Chinese customs confirmed a jump in wheat imports to 191,563 tons in March.

Rice

Bearish news: This week 52,300 tons of rice was posted for delivery. Over half of the tonnage was long grain milled weighing in at slightly over 28,000tons spread amongst various countries. Just less than 10,000 tons of rough rice was bought by Mexico, Venezuela, and Honduras. Nearly 9,000 tons of medium grain milled went to Asia including Taiwan, and Israel.

Asian price quotes continue to slip lower as Vietnam and Thailand bring more rice to market.

Prices will only return to higher levels when demand increases. Thailand rice is quoted at $480 — $485 Vietnam rice is around $450 per ton. Pakistani rice is quoted at the low price of $380 a ton.

There was a decrease of 670 buy contracts last week as traders started profit taking. Volume for last week averaged 1,620 contracts per day which is relatively heavy. Rice is oversold but the trend is negative.

Bullish news: Total exports for last week were 91,400 tons. Turkey bought 22,000 tons of medium rough. We sold 20,000 tons of long grain milled to Haiti, Canada, Ghana, and Saudi Arabia.

Europe is expected to start buying soon. Cuba will be resolved hopefully in the next few months adding to exports. U.S. rice is blocked European and Cuban markets solely because of political sentiment.

Cotton

Bullish news: Trader expectations were 300,000 to 450,000 bales before the USDA export sales report. USDA reported export sales of 362,100 bales. The supply of cotton in public storage was 7.776 million bales as of March, down 3.398 million bales from 2009.

India went from exporting cotton to increasing the export tariff bringing a halt to export registrations. They appear to be adopting the Argentine strategy, trying to limit exports in order to create a surplus at home and knock back prices. India is the second largest world exporter after the U.S., and a major supplier to China. The Indian government is also trying to encourage farmers to plant more grain in hopes of limiting food price inflation.

Bearish news: USDA reports indicate cotton planting progress close to normal. Cotton planting is 11 percent completed, just slightly behind the 12 percent average for this date. Texas is 15 percent planted. California is behind, but Arkansas and Mississippi are ahead.

Cotton bales certified for delivery are near a million. There is very little evidence that commercial traders have found a home for the cotton. When these supplies are released into markets, trader profit taking could temporarily reduce prices.